Dear Leaders,

According to data sourced from the National Foundation for American Policy (NFAP), denial of work Visas to employees of India’s largest IT services exporters has risen to an
all-time high. The data sourced from the US Citizenship and Immigration Services (USCIS), shows a steep jump from FY15 when the denial stood at 6%.

India’s big four software services exporters – Tata Consultancy Services, Infosys, HCL Technologies and Wipro – have seen half of their work Visa applications rejected in the past
year as the Donald Trump administration pushed for more employment and higher wages for American employees.

Request for evidence as a % of H-1B H-1B visa rejection rate (in %)

(Right-hand scale)
70 30
60
60
25
50 25
20
40
15
30
22 10
20
4
10 5

0 0
2015 2018 Oct-Dec
Year ended Sep 2018

Source: Nomura Financial Advisory and Securities

VISA REJECTIONS

As per a report by the NFAP, while the Visa denial rate for TCS has gone up from 6% in FY15 to 37% in
FY15 FY19
Q1 FY19, for Infosys, it has gone up to a whopping 57% in Q1 FY19 from 2% in FY15. In case of HCL, the Company
(Oct '14-Sep '15) (Oct-Dec '18)
denial rate has gone up from 2% in FY15 to 43% in Q1 FY19, whereas for Wipro, it has shot up to 62% in
Q1 FY19 from 7% in FY15. Wipro 7% 62%
Infosys 2% 57%
Last week, the Office of Management and Budget of the United States said it had completed a review
of a proposed regulation from the Department of Homeland Security. The new regulation would HCL America 2% 43%
mandate employers to register without paying the H-1B Visa fees of those employees whom they TCS 6% 37%
intend to sponsor for H-1B Visa permits. Instead, a lottery system would shortlist people for the work
Source: NFAP
permits, following which the applications would be accepted.
H-1B H-1B approved
Another recent data released by USCIS also shows a spike in RFEs (request for evidence) and Visa Year
Denials(%) after RFE(%)
denials. The petitions approved with RFEs for the first three quarters of fiscal 2019 was at 62.7% with
an initial denial rate of 16.1%, a result of President Trump’s ‘Buy American, Hire American’ executive FY 2015 4.3 83.2
order. In fiscal 2015, approval with RFEs was as high as 83.2%. FY 2019 16.1 62.7

Besides denial of work Visas to new employees, a good majority of applications for Visa-extension are also being rejected. Thousands of Indian IT professionals Visa-extension
applications have been rejected, or have received repeated requests for evidence (RFE). A study by VisaGuide.world found that the US immigration agency officials are more likely
to issue a Request for Evidence (RFE) to Indian H1B Visa applicants than to people from other countries. According to the data collected by the web portal, 72.4% of Indian applicants
and 61.2% of applicants from the rest of the world received an RFE.

India & China Accounted For 82% Of H-1 B Visas In 2016

Origin countries of H-1 B visa recipients in 2016

India 126,692

China 21,657

Mexico 2,540
South Korea 2,377
United Kingdom 1,769
France 1,479
Philippines 1,455
Taiwan 1,425

Brazil 1,253

Germany 1,061

Japan 1,011

Italy 896

@StatistaCharts Source: U.S. Department Of State

While getting an RFE from the USCIS doesn’t mean rejection of the application, it requires the candidate to furnish more documents, at times more than once. And even after
completing all the documentation, the Visa extension may still not come. RFEs come with as many as 21 checklists, including work plan for two-and-a-half years.

For decades, India’s software engineers fancied an onsite stint in the US, and more often than not this worked as a motivation for joining the technology services industry. According
to the USCIS, Indian nationals accounted for about 2.2 million of the 3.4 million H-1B Visa petitions filed in the decade to 2017. Many of those IT professionals have either returned
to India in the past two years, or are looking for opportunities here.

In 2018, New Jersey-based Cognizant, which has most of its employees working out of offices in India, and five Indian IT services companies together accounted for two-thirds, or
8742 of the 13,177 H-1B extension petitions rejected from 30 technology companies. While Cognizant saw 3,548 rejections in the past year, 2042 applications of Infosys and 1744 of
Tata Consultancy Services (TCS) were disallowed. According to a report by the Center for Immigration Studies, “the major US-based firms such as Microsoft, Amazon and Apple
increased their H-1B workforces during the year, while net reductions were imposed on the big Indian outsourcing firms.”

H-1B Visas are usually issued for three years, with a possible extension of another three years. Many executives who are in the US for years on work Visas seek permanent resident
status, or the so-called Green Card, as the second term of the H-1Bs comes to an end. The RFEs are usually issued at the time they seek the first extension, or when apply for Green
Cards. For Indians, the wait time for the Green Card is as much as 10 years.

Industry observers and human resource experts said the onsite stint for most technology professionals was nine months, but some of them extend the stay to more than 18 months.
That model will undergo much change but the rejections are likely to continue. Nevertheless, for people who have spent long years and have US-born children, it may be an uphill
task to relocate in weeks, and would prove to be quite traumatic.

Switching jobs for H-1B Visa holders got tougher

It is getting tougher for H-1B Visa holders in the US to switch jobs even if the new job is similar to the old one and requires the same exact skill sets. The USCIS has denied several
applications by the new employer citing that the new position does not constitute a 'specialty occupation’. Moreover, if the H-1B holders start working elsewhere and the transfer is
denied, the person could be 'out of status' with a bar on entry into the US for three to ten years, unless the old employer is willing to take back the worker.

Typically, there is no grace period if the H-1B status has already expired by the time the denial intimation is received. If, however, there is time remaining on the original H-1B
approval with the old employer, the beneficiary will have a 60-day grace period or the time remaining on the original approval.

So what exactly is a ‘specialty occupation’? H-1B Visas are granted to persons trained and employed in specialty occupations. Many of the 'Requests for Evidence' received by over
25% of H-1B petitions involve the question as to whether or not the position meets the criteria of a specialty occupation.

The Code of Federal Regulation says a specialty occupation requires “theoretical and practical application of a highly specialized body of knowledge, and attainment of a bachelor’s
or higher degree in a specific specialty as a minimum for entry into the occupation.” Examples include those professions involving STEM (science, technology, engineering, and
mathematics).

The H1B work Visa has been the preferred Visa for Indian IT companies and has helped them keep costs down and gain a margin advantage over multinational players by sending
engineers to the US. However, IT services firms have been accused of misusing the lottery-based system, which allows 65,000 Visas for the general category and an additional 20,000
to those with a US Master’s degree from an accredited institution.

H-1B Visa Denials & Approvals for Fiscal '18

Company Initial (fresh) approval Continuing Denial Approval(%)

Amazon Com Services 2,399 45 98

Capgemlnl America 273 914 60

Cognizant Tech Solutions 500 3,584 68

Deloltte Consulting 593 1,281 75

Facebook 651 12 99

HCL Americas 196 509 79

IBM India 62 288 82

Infosys 69 2,042 74

Intel corporation 873 19 99

L&T Infotech 154 171 87

Microsoft Corporation 1,252 54 99

Mindtree 148 89 83

TCS 528 1,744 82

Tech Mahindra Americas 579 300 82

Wipro 273 599 82

Indian companies, however, fear that the process of issuing Visas would be non-transparent resulting in the US favoring US technology companies over them.

Infosys has reportedly lost a lot of good employees in the organization, purely due to the lack of H-1B Visas. The company has had to come up with a ‘new value proposition’ to stem
the talent drain. Nasscom is working with the US government to make H-1B Visa process easier and non-partial.

Shivendra Singh, Vice President of the global trade department at Nasscom said that they are asking the US to streamline the process so that “Indian IT companies continue to make
the US economy more competitive by working with more than 75% of Fortune 500 companies, the majority being American companies.”

Besides, Indian IT services firms are increasingly looking at nearshoring options to service clients in the US as restrictive Visa regulations in the country are making it increasingly
difficult for them to depute engineers to this key client geography. With nearshoring, IT firms establish delivery presence in countries and locations closer to the client geography
and depute employees working in those centres to service clients whenever there is a need.

Recent news suggest that the immigration department is reconsidering its immigration practices to ensure that the US businesses do not face a shortage of skilled tech workers.
This is a good development and the department is acting after complaints from several large US companies. The hope is that the department will ease down the restrictions imposed
on IT companies -- especially the Indian ones.

© Powered by Knowledge Center

Connected world.
Connected Experiences.